Effective Analysis I

T-Perspective vs. Fundamentals
Fed's Ben Bernake meeting on Friday at the Jackson Hole Economic symposium might be the catalyst that would overshadow the general outcome of the US Consumer Confidence expected to be favorable for the USD. 

And subsequent results of the US GDP figures culminating  the Fed's Beige book survey by the middle of the week. However, a slow yet grandually accepted growth or economic recovery has been stated contrary to QE3 expectations that still prevails to some analyst and investors eminent to such action by the Federal Reserve. There will always be a highlight on this event while the European crisis continues to find some finalization to resolve these problems.

Finding the volumes to weigh on which side would the market cling towards its final direction still remains to be seen. But the underlying Technical perspective for the US Dollar (Index) has initially provided a small window of positive market breath.

Please continue....

Trend Analysis on Majors & Cross rates

GBPJPY & EURJPY

The two previous market analysis has viewed FX prices widened considerably with the GBPUSD and the Japanese Yen both gaining against the USD.

With mixed reports from the Fed QE3 and the more negative GDP numbers last week where the USDx closed lower at a vulnerable support price of 78.80. The USD thus far has continued to weaken without any real signs of a recovery unless proven otherwise with a surprising end month closing and opening for the month of May.

Although, currently due to the month end trading activity the USD has found some relief rally and position adjustments after Friday's GDP bearish report. Prompting today's recovery are some bids for safer-haven trades as dampened risk-appetite, mainly due to Spain in recession. And a mixed report from the U.S, personal spending dropped from 0.9% in February to 0.3% in March, while personal income ticked 0.1 percent higher from 0.3% in February, on the other hand, Chicago purchasing managers index dropped sharply to a 56.2 from 62.2 in February.

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Technical perspective: EURJPY Cross - Part 2 Update

EURJPY UPDATE: MCH 21 '12

UPDATE: Although, the momentum for the EURJPY slowing pacing the GBPJPY this update of prices extending towards the current price of 111.23 extension high has just penetrated the trend line resistance. The USDJPY recovery above the 84.00 levels have supported the EURJPY as it continues to move towards the 885.00 trading range where most have anticipated where the USDJPY is heading to.

Meanwhile the EURJPY cross with its current pace is aiming for a 111.55 - 112.35 trading range for this week as long as the continued strength of the USDJPY continues its present rally. The pivot price and support still remains to be at the lower price levels of 108.10 -108.65 range way above its Daily Moving Average price of 109.25. Momentum remains steady to higher while the positive tone remains for the Stochastics with the relative strength still has some room to move higher before it reaches an overbought situation. The equi-distant rising channel has been defined in the daily chart and comparing with the weekly may prove to have some possible offers that would "trigger daily pullbacks" at the end of the trading week & month. This recovery from the low of 105.55 has found a sustainable trend so far.

Technical Perspective: GBPJPY Cross

Daily GBPJPY cross as of March 19 '12

The market potential of both cross rates have been significant after last Friday's sudden move after the news reports. The GBPUSD rally was likewise the catalyst for the GBPJPY cross to rally behind the EURJPY and have touched 132.42 high. The 130.75 Moving average would also serve as the initial support. Other technicians are looking for a continued pressure if risk appetite would remain on hold for the USD to move lower as it did last Friday's closing price. The weekly and monthly longer term outlook have been significantly bullish and remains to be tolerable for any drawback movement for the USDJPY relationship. Keep track of the closing prices above the previous day's closing and opening price levels.

And this was even contrary to its technical candle formation of a two consecutive weekly spinning top / doji especially located at the higher segment of its price range. And this was where other traders saw a possible correction but turned otherwise. The extension prices at the 132.40-133.00 will be its temporary topping out if and whenever a consolidation would be made. However, the GBPJPY would outpace the EURJPY by this coming week's trading since the USD may gain some lost ground on a daily correction.

FOREX Technical Perspective: EURJPY

UPDATE as 02.22  While the EURUSD strength delayed reaction even after the EURO group's successful deal, it is only now that the market has gained interest due to most traders were actually back from the US President's day holiday schedule. The USDJPY's price acceleration to 80.28 high have indeed given the EURJPY the fuel to reach its 1st initial objective stated above at 106.31 high as of this writing. There is no actual straight price rally unless enough volumes and fresh risk appetite positions are initiated by renew institutional coming to the market. The only danger that may subsequently arise is a probable formation of candle bars on a day to day basis that may lead to an island formation for a major corrective move supported by some fundamental reason. But for now we do not anticipate one. However, such moves lower would enable us to improve our trailing orders for protective strategies & would be booking the gains accumulated since February 2, 2012. Although, leaving a small number of units to be risked whenever the 2nd leg higher would resume.

Technical & Behavioral Perspective: EURJPY

EURJPY CROSS DAILY CHART

UPDATE : As of Feb 09- Expect increase volatility, follow-through price action and pullbacks in the next 2 trading days especially the trading sessions in European market towards the US American trading sessions on Friday for both majors & cross rates respectively!
The EURJPY candle configuration is quite interesting then prior to today's upward direction as fueled by the surge on the EURUSD, due to reports that there may already be a more likely deal addressing the Greek debt crisis. The technical perspective signaling a positive tone was the recovery on the EURUSD and simultaneously a move higher with the USDJPY.

A move for the USDJPY higher is a lost in Yen value. The break from a triangle formation came at 100.60/85 that followed through at current price of 101.99 from a rising equidistant channel application. Closing prices above these levels would still provide a positive tone thereafter with a further corrective daily moves on both directions giving a false reversal scenario.

A pause and consolidation after a dramatic move is likewise considered which would cause some traders to reluctantly create trade positions. A word of caution, never try to catch a rapid market movement as pullbacks would cause to trigger stop loss due to wide price fluctuation.

Technical Perspective: GBPJPY

GBPJPY Cross as of Feb. 06, 2012

On the Technical perspective; the GBPJPY started of with the GBPUSD initial price reversal at 117.53 low; with a higher bottom at 119.55 serving as a good support, likewise a double bottom price level within a rising channel. The GBPJPY is a 2nd cross rate currency pair that has very market potential which has been shadowing the GBPUSD on its 1st leg of a price reversal. While breaking its trendline resistance and its current working price of 121.15 is above the 21WK-MA of 120.85 as shown of this candle chart of the GBPJPY on a Daily formation. The MACD is now on a positive tone after the movement while the cross awaits some follow through from the GBPUSD. Its initial attempt to its previous high of 121.85 may find some temporary resistance unless a USDJPY recovery would out pace the GBPUSD on the way up. A market behavior of the GBPUSD correlation with the Japanese Yen vs. the USDX would be the primary focus for the coming weeks ahead.

Market Timing in Forex Trading - MegaTrade101

This has always been the case for most traders and strategist whenever trading the Foreign Exchange Market. It would be nice to share some of the successful trades made specially these current market conditions. As they would be very useful for some who may be starting to feel how the FX market really moves when major economic numbers are released. However, there are a lot of worldwide reports to consider within a given period of time and to be able to cover all of them would be quite demanding for a trader.

As correlation in the currency market in particular are as important to every trade position marked in the market. The degree of trading difficulty is ever increasing by the day as uncertainty and unpredictability of wider price fluctuation will always be present. But in recent market conditions, the most impressive price reaction is a currency who has made a dramatic price movement either way and stalls.

This is when traders are contradicting either a follow through or a pullback would be made causing the trader's reluctance and patience to be tested. This also applies to those who are too eager or for those who happens to wait for a confirmation of a price break/confirmation signal. If this were true to the fact, then everyone would be considered a winner.

But the total opposite does happen and the next question would be ...where did I go wrong?

In the Foreign Exchange market, to improve market timing would really depend in developing a keen eye in spotting trade set-ups combined with identifying market behavioral patterns for each currency related trade, focused only on entry & exit price range. Naturally, this would only follow once a strategic trade plan has been established. A certain degree of elimination and process of deduction would always be in place before any trade execution is made. And that is being able to draw an informed and reasonable decision from the due diligence whether such trade plan is worth the risk/reward ratio given a specific period of time exposure in the market.

It is quite easy to enter into a trade at any given time especially if and when the market has enticed the trader to get into a trade by impulse. What is equally important is getting out of the trade alive with at least a fairly good gain. But there are some traders, even seasoned ones who tries to catch the market action in either direction and subsequently would place an order to trade feeling not to be left out for a chance and an opportunity of riding with the market sentiments.
For the complete article including the process of developing 'MARKET TIMING in FOREX TRADING' visit our website: http://megatrade101.com/megatrade101/fxminar 

• In addition, please refer to MEGATRADE101 - STRATEGIC FX TRADING TECHNIQUES

Forex Trading: Spot FX Vs. Futures SRO

EURO & USDX - 8+ Strategic Trading Techniques Applied

Most major currency pairs have reached their respective oversold and overbought areas as indicated by both the W% Range and the Relative Strength Index; where it measures the weakness and strength of its prices in a given period of time frame. Video Support: http://youtu.be/2yLP4XE_B3s

This has been the norm of the market prices, thereafter an expected correction to the opposite direction shall be made. The RSI commonly known for its relative strength index as a technical tool, is quite effective, especially where a combination of divergences and convergences are created by the prices from time to time. This is where we could identify two opposing directional lines between the RSI and the prices on the chart either using any of the chart types.

FIG. 1 DAILY EURUSD CHART

In keeping our reports and Market view as simple as possible; the Daily EURUSD shown above is within a Downward Channel since May of 2011 with a few major corrections in October. The point of Price Reversal from both May and October would have the supporting analysis based from the Financial Futures which would not have been reflected above as the equivalent Volumes and Open Interest data are not included unlike the chart of the EURO Futures and USDX in Figures 2 & 3 below. See the comparison and pls. pay close attention to the distinctions also mentioned in our Trading video.

The Japanese candlestick bar is the most reliable tool amongst the other charting systems applied today. Due to its uniqueness in Japanese bar analysis and interpretation as compared with the Western Bar system below in Fig. 2. With these alone, you are actually applying at least a minimum of three to eight (3-8) technical methods of trading analysis. As we do have applied a few tech tools such as the MACD, RSI, VOI, and the 3-line MA Cross over indicators on the chart. A clearer explanation is also mentioned in our video report and analysis. For a complete report pls. visit http://www.megatrade101.com/ and watch our supporting video below.

Technical Perspective - SRO - Majors/Cross Rates

With the continued uncertainty of the directions in the financial markets; a technical perspective of the chart formation for the European currency pairs and the USD Index would be appropriate at this time. Setting aside the fundamentals for the time being; the USDX has moved lower back to the 73.80 levels and the bearish outlook on a day to day basis remains strong. These levels on a weekly Stochastics/RSI overlay proves to be vulnerable for a near term directional trend lower that would threaten the support levels. We, however would not be surprised whenever this happens prompting our trade team to take a speculative trade in anticipation of this market movement.

An inverse reflection is found also with the EURUSD chart formation. And the anticipated move shows the recovery of the Euro and the British Pound as heading North and may build momentum / volumes for the next few trading days ahead. currently at the 1.4439 and 1.6385 as of this writing. Although, the degree of difficulty has not change at all and the continued volatility would be seen ahead where a probable breakout would occur between the Euro, Pound and the US Dollar simultaneously. This market analysis would have to consider the Euro to react on the GDP numbers for the 2nd qtr.and the ECB as well.

The weekly MA-Long Divergence more the EURGBP Cross rate has indicated a positive tone for technical trades to be implemented prompting the influential movements for both the Euro and Cable to move higher. Although, we are inclined to believe that this has been a speculative curve for a probable weakness of the USD moving forward. No such confirmation however, it would be priced-in when the US dollar does move lower.

We would still prefer to cross trade the Pound, Euro with the cross rates at this time but would not disregard the Japanese Yen and Swiss Franc. Although, both currency pairs have to be treated as isolated cases since the fundamentals are entirely two different situations compared with the European and US market conditions. Meanwhile, the opening price gap of the USDCHF in the Asian sessions where technically sound and in line the previous candlestick formation encircled on the chart that already showed a signal of price reversal before hand.  With the market sentiments from the SNB contentions of taking similar action in the market whenever necessary shows its grip on the recent prices. With prices opening at the 0.7898/00 from a Friday closing price of 0.7767 should not be discounted. the market price movement is critical for the next couple of trading days. However, a retracement or pullback is expected and this would have been a technical adjustment from any oversold areas for the past few weeks of bearish price direction.